On December 31, the world's largest steelmaker Luxembourg-based ArcelorMittal announced that it has increased its offer to purchase all shares of Canadian miner Baffinland Iron Mines Corporation (Baffinland) to C$1.40 ($1.40) per share, from the previously announced C$1.25 ($1.25) per share, valuing the company at C$551 million ($554 million) with the current offer.
ArcelorMittal extended its offer from December 31, 2010 until January 10, 2011, after its rival bidder Toronto, Canada-based Nunavut Iron Ore Acquisition Inc. (Nunavut Iron), a subsidiary of US-based Iron Ore Holdings, LP, increased and extended the deadline for its offer.
On December 29, Nanavut Iron raised its price to C$1.40 ($1.40) per share, to acquire 60 percent of Baffinland outstanding common shares, from $1.35 per share for 50.1 percent of the shares. The bid was due to expire on December 30. Nanavut Iron subsequently extended its offer to 11:59 p.m. on January 10, 2011.
In a statement, the Baffinland board of directors has recommended that ArcelorMittal's offer should be accepted, saying, "The board of directors, upon consultation with its financial and legal advisors, has determined that the amended ArcelorMittal offer is in the best interests of Baffinland and the Baffinland shareholders."
As SteelOrbis previously reported, the Baffinland board also backed ArcelotMittal's offer of C$1.25 ($1.25) per share for 100 percent of the shares, against the hostile Nunavut Iron offer.
Baffinland's Mary River project has proven reserves of about 365 million metric tons of ore, grading an average of 65 percent iron, and about 500 million mt of ore resources. For some months now Baffinland has been looking for partners for the C$4 billion (US$4 billion) project, which is expected to produce 18 million mt per year.
ArcelorMittal has already received the necessary approvals for acquisition from local authorities.